Skift Take

Priceline’s growth over the past decade is nothing short of remarkable. In this report, we answer, a simple, but important question — Where do we go from here?

Today we are launching the latest report for our Skift Research subscribers, A Deep Dive Into Priceline’s Competitive Position in Travel 2017.

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In the first section of the report, we peer into each of one of the company’s brands, including, Kayak, Agoda,, OpenTable, and

We discuss how’s decision to pursue an agency model helped fuel inventory growth and why’s margins are so much higher than others in the industry. We then provide our thoughts on the vacation rental market and how is positioned. Finally, we look at’s China partnership with Ctrip.

For Kayak, we provide detailed financial estimates that go far beyond what is in the public filings. We discuss the rationale of the Momondo acquisition and why metasearch matters more than the direct financial impact to Priceline.

We provide an overview of the Agoda and brands and determine the likely financial contribution to Priceline. For, we adjust for the GAAP accounting treatment of net revenue of the opaque Name Your Own Price model to estimate true economic impact. We examine the OpenTable write-down, looking at what went wrong and whether or not the impairment is due to overpaying for an asset or owning a deteriorating business.

Finally, we dig deep into company-level financials discussing revenue trends and key drivers like gross bookings, room nights, daily rates, and take rates. Operating margin faces a headwind from digital ad spend, especially on Google AdWords. We discuss how this dynamic is likely to play out.

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The second section of the report provides a detailed analysis of Priceline’s key online travel agency competitors in Expedia and Ctrip along with the leading metas in TripAdvisor and Trivago. We look at how the companies compare on revenue, gross bookings, margins, advertising spending, digital advertising, market share, and broader business fundamentals. We also touch on whether it could make sense for Priceline to consider acquiring TripAdvisor.

Here is what you will learn from this report:

  • How the Agency model helped rapidly scale its hotel business
  • Trends in merchant versus agent revenue for Priceline and Expedia
  • Why Priceline’s margins are so much higher than its peers
  • How is growing its vacation rental business and its competitive outlook versus HomeAway, Airbnb, and TripAdvisor
  •’s rationale for flight testing
  • Priceline’s approach to corporate travel and broader industry dynamics
  • Priceline’s strategy in Asia
  • Estimates of Kayak’s revenue, expenses, and EBITDA margin
  • Rationale for Priceline purchasing Momondo
  • Why metasearch is important for Priceline
  • Hotel spending trends on metasearch
  • How much Priceline and Expedia spend on Trivago, TripAdvisor, Kayak, and Google
  • What Kayak could be valued at as a standalone entity
  • Whether OpenTable is a good asset acquired at a bad price or a fundamentally impaired one
  • Estimates of OpenTable’s current financials and implied current valuation multiple
  • Agoda’s rapid growth path and our revenue estimates for the unit
  • How is phasing out the opaque merchant model
  • What actually contributes to the company financially
  • Why opaque bookings inflate GAAP revenue and deflate gross profit, but are neutral to operating income
  • How Priceline uses to have a more complete online travel agency platform
  • Analysis of Priceline’s revenue, gross bookings, room nights, daily rates, and take rates trends along with our forward outlook
  • A detailed look at the company’s margins, looking at the headwind from variable ad spend and tailwind from fixed cost operating leverage
  • Estimates of true U.S. revenue for versus GAAP reported results
  • In partnership with Hitwise, U.S. online travel agency market share trends
  • Strategic and financial comparison of Priceline with Expedia, Ctrip, TripAdvisor, and Trivago
  • Does it make sense for Priceline to acquire TripAdvisor?
  • Airbnb as a threat to the online travel agencies — what is real, what is not
  • Why can maintain its dominant position in hotel distribution

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This is the latest in a series of monthly reports, data sheets, and analyst calls aimed at analyzing the fault lines of disruption in travel. These reports are intended for the busy travel industry decision-maker. Tap into the opinions and insights of our seasoned network of staffers and contributors. Over 200 hours of desk research, data collection, and/or analysis goes into each report.

After you subscribe, you will gain access to our entire vault of reports conducted on topics ranging from technology to marketing strategy to deep dives on key travel brands. Reports are available online in a responsive design format, or you can also buy each report a la carte at a higher price.

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Tags: booking,, glenn fogel, kayak, ota, priceline, research

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